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How can NRI Invest in Indian Equities

Equity markets have always been a lucrative option for traders looking to mint money. And this is not only reserved for Indians. Non-resident Indians (NRIs) too can play in the markets. Here’s your five-point cheat-sheet on how NRIs can trade in India:

 

  • The process for NRIs to invest in the Indian equity markets is quite easy. They need to open a NRI trading account and then invest in equities using this specific account. Infact, NRIs have a dual benefit –they have access to the Indian equity market as well as overseas markets in their home country.
  • There are some additional procedures that NRIs would have to undertake when they are investing in Indian equities. Earlier, the Reserve Bank of India (RBI) was required to provide permission for every purchase. This procedure has now been simplified by the introduction of the Portfolio Investment System (PIS) bank account for NRI investment. NRIs can now buy and sell shares on a recognized stock exchange by routing such transactions through their NRI savings account with a designated branch.
  • Under the PIS system, the trades for the NRI trading have to be routed through the PIS account and this would be an NRE PIS savings account in case the amount is to go out of India, or an NRI PIS savings account, if the amount cannot move out of India. In this system, there would be linkage of three accounts simultaneously – theNRI trading account, the NRI PIS bank account and the demat account.
  • The system would then work smoothly to ensure that the entire purchase or sale transaction is completed without a lot of effort by the individual. Each step follows the other, so adhering to them would ease the investment process. The funds for the purchase of the shares are present in the bank account. When the trades are executed, the money is transferred from the bank account, and the shares are deposited in the demat account on the designated date. The reverse takes place when there is a sale of the shares from the NRI trading account, so that the shares are transferred out of the demat account and the money gets deposited into the PIS bank account.
  • Trading, thus, becomes very simple to understand and this makes the individual comfortable to undertake the transactions at his/her convenience. Kotak Bank has the required facility to open the PIS account and then link it with the necessary demat and NRI trading accounts so that you are able to complete your requirements. Once this is set up, then the only question is execution, which is not a difficult task, and which can actually be undertaken at your convenience.

Author Box

Kotak Securities is one of India’s largest share broking firm offering demat account, online trading, mutual fund and NRI account along with a research division specializing in Sectoral Research and Company Specific Equity Research. We also provide you with latest updates and news from share market.
Express your views on their Facebook Page and Twitter Handle (@KotakSecurities) or you can also visit www.kotakSecurities.com for more information.

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